Polish retail property market to shift to smaller cities, says C&W

Cushman & Wakefield has released a new report on the Polish retail market, which found that 406,000sqm of retail space was completed in 2019. The development pipeline currently stands at approximately 500,000sqm, 85% of which is scheduled for opening by the end of 2020. Going forward, investors’ interest will increasingly shift towards smaller cities below 100,000 inhabitants, says Cushman & Wakefield, adding that these markets account for nearly 50% of the development pipeline.

Investment activity on the Polish retail market hit €1.95bn, largely in line with the transaction volumes in the last five years. Despite the relatively robust investment activity, retail yields moved out in 2019, standing at 4.75% for prime shopping centres in Warsaw.

Poland’s total retail stock across all formats reached 15m sqm in 2019 and 456 shopping centres, providing more than 11m sqm of floor space, continue to dominate the Polish retail market, accounting for nearly 73% of the nation’s total retail stock. The highest volume of the new supply (183,000sqm) was delivered in shopping centres. The overall vacancy rate for Poland’s 18 biggest markets remains at a low of 3.9%. Prime shopping centre rents stand at €120-130sqm/month in Warsaw.